Vodafone (LSE: VOD) shares have been on a rip in 2026, up 17% year to date. And since this time two years ago, the rise would have turned an investment of £10,000 into a bit more than £17,000. Oh, and there’ll be some dividend cash to add to that.

We do, however, need to see this against the longer-term background. Over the past five years, Vodafone shares are down 13%. But with the recovery of the past couple of years, it does look like the company’s transformation is going well.

Strong momentum

CEO Margherita Della Valle broadly summed up Vodafone’s impressive progress at interim time. She said: “Following the progress of our transformation, Vodafone has built broad-based momentum. In the second quarter we saw service revenue accelerating, with good performances in the UK, Türkiye and Africa, and a return to top-line growth in Germany.”

She added: “Based on our stronger performance, we are now expecting to deliver at the upper end of our guidance range for both profit and cash flow, and as our anticipated multi-year growth trajectory is now under way, we are introducing a new progressive dividend policy, with an expected increase of 2.5% for this financial year.“

And she reiterated the same profit and cash flow guidance at Q3 time in February. Full-year results for the current year are due on 12 May. They should be essential reading.

What next?

Vodafone has come a long way since 2023, when the boss was telling us: “Our performance has not been good enough. To consistently deliver, Vodafone must change.”

But how much more is there to come from Vodafone shares? Checking on broker forecasts, I get mixed messages. On the one hand, they’re predicting progressive earnings rises through to at least 2028.

Management cut the dividend in half for 2025 as part of cost-cutting plans. But we should see increases — albeit modest ones — kicking in again. We’re only looking at forecast dividend yields of around 3.4% — way down from the unsustainable 10% levels in their free-cash heyday. But strong cover by earnings is vital, and we should be seeing plenty of that.

So, it sounds like all is going well. But brokers disagree on whether we should buy Vodafone shares now, or sell. And they have an average price target only around the current level.

Danger not over

The problems aren’t all solved, and the CEO is straight about more needing to be done. For one thing, net debt reduction stalling. And it’s actually expected to rise this year, to around €25bn.

And Vodafone is committed to some serious capital expenditure in the next few years.

My take on Vodafone shares now? I like how well things have gone, but there’s still much uncertainty. And I wonder if the share price might have gone a bit too far, too soon. I don’t see much safety margin today.

I do see solid long-term potential at Vodafone. But for now, I think investors might do better to consider some of the better value alternatives out there.